VU MIF Programų sistemų katedra

Programų sistemų projektų ir kokybės valdymas

PROJEKTO INICIJAVIMAS

Testo medžiaga

Vilnius - 2011

Item: 1

Compliance is mandatory:

a) for a standard, but not a regulation; b) for a regulation, but not a standard; c) for both a regulation and a standard; d) for neither a regulation nor a standard.

Compliance is mandatory for a regulation, but not a standard. A regulation refers to a document that specifies characteristics of a product, process, or service to which it is mandatory to comply. A standard refers to a document generated by a recognized body that provides reusable rules, guidelines, or characteristics for which compliance is not required.

Item: 2

Which phrase BEST characterizes a program?

a) a project that meets a particular objective; b) a group of projects managed in a coordinated effort; c) a set of deliverables that collectively meet a specific project goal; d) a project that is subdivided into smaller, more manageable components. According to the PMBOK, a program is a group of projects managed in a coordinated way to obtain benefits that could not otherwise be obtained from managing the projects individually. A subproject is a project that is divided into smaller, more manageable components.

Item: 3

Which statement about a project with BCR of greater than one is true? // BCR – Benefit Cost Ratio

a) It indicates that the project is extremely high risk; b) It indicates that the return for a project will be low; c) It indicates that the project is currently ahead of schedule; d) It indicates that the costs of the project are less than the benefits. A BCR>1 indicates that the costs of the project are less than the benefits. The BCR is often used to determine if a project would be desirable to undertake. A BCR>1 indicates that the project's benefits are greater than the costs. Projects with higher BCRs have higher returns. A BCR>1 does not indicate that the project is currently ahead of schedule. BCR has no bearing on the schedule of a project.

Item: 4

All of the following are reasons that it is important for a project manager to communicate effectively with project stakeholders, EXCEPT:

a) stakeholder input is critical to defining a project's scope; b) all stakeholders directly provide financial support for a project; c) stakeholders provide valuable information regarding the business need for a

project; d) understanding stakeholders' needs is critical for successful completion of a project.

All stakeholders do not directly provide financial support for a project. Stakeholders are parties that are involved in a project or are directly affected by the outcome of the project. While some stakeholders may provide financial support for a project, not all do. All of the other options are incorrect because they do represent reasons why effective communication with stakeholders is important. Stakeholder input is critical to understanding the business need for a project, defining a project's scope, and successfully executing and completing a project. The more effectively a project manager can communicate with stakeholders, the more chance the project will be considered successful.

Item: 5

Stakeholders have more ability to influence the final outcome of a project:

a) later in the project life cycle; b) earlier in the project life cycle; c) anytime during the project life cycle; d) earlier in the project life cycle, but increasing over the life of the project.

Stakeholders have more ability to influence the final outcome of a project earlier in the project life cycle. Usually stakeholders have more ability to impact the project early on, and this declines some as the project progresses and work is performed and costs are incurred.

Item: 6

Your organization is currently working on four different projects. A high-profile customer requests a project, and management has decided to temporarily suspend work on one of the other projects so that resources can be allocated to the new project. The projects in progress, Project A, Project B, Project C, and Project D, have BCRs of 1.2, 0.7, 1.0 and 0.8 respectively. Based solely on this information, which project should you recommend for suspension? // BCR – Benefit Cost Ratio

a) project A; b) project B; c) project C; d) project D.

Based solely on this information, you should recommend Project B for suspension. In this scenario, you are given four projects and their respective BCR values. Projects with a higher BCR are more economically beneficial than those with a lower BCR value. Project B has the lowest BCR value, so you should recommend it for suspension. You should note that the question asks you to make a determination based solely on this information. This would most likely not be the case. Other factors might need to be considered, such as the percentage of completion of each project and which resources were working on each project.

Item: 7

You are providing a preliminary cost estimate for a project to the project sponsor. The details of the project scope are not complete, but you believe the project will be very similar to a project completed by the organization last year. Which estimating technique should you use?

a) parametric modeling; b) analogous estimating; c) bottom-up estimating; d) Monte Carlo analysis.

You should use analogous estimating. Analogous estimates use historical data from similar projects as the basis for estimating a project's costs. Analogous estimating is also known as top-down estimating. Analogous estimating is generally cheaper than other techniques, but it is also less accurate. It is most accurate when the previous projects that form the basis of the estimate are similar to the new project, and not just similar in appearance. You should not use bottom-up estimating because all of your deliverables have not been defined. Bottom-up estimating is based on summing individual work items to get a total cost. The cost and accuracy of using bottom-up estimating is dependent on the size and complexity of the work items. The cost estimate is more accurate when the work is broken down to its most granular level, but this also increases the costs associated with deriving the estimate. You should not use parametric modeling. Parametric modeling uses the project characteristics in a mathematical model to produce a project estimate. These can be very simple (fiber-optic wiring will cost x dollars per linear foot to install) or very complex (software development models that use multiple adjustment factors, each with multiple key points). Parametric modeling is more reliable when the historical information used to develop the model is accurate, the parameters used in the model are easily measured, and the model scales well. While you could use parametric modeling to generate your estimate, this would not be the best choice in this scenario because only a preliminary estimate is needed. You should not use Monte Carlo analysis. Monte Carlo analysis is a complex simulation (usually computer-based) that uses the network diagram and estimates to simulate many different scenarios in a project and determine the probable cost or schedule results. A Monte Carlo simulation would be useful to determine the probability of a project

completing on time or on budget, the probability of a task being on the critical path, or the overall risk of a project.

Item: 8

You are evaluating a potential new construction project for an assisted living center. The expected cost of construction is $1,750,000. Based on current real estate market values and other determining factors, you estimate that you will be able to sell the new facility for $2,300,000. What is the BCR? // BCR – Benefit Cost Ratio

a) 0.24; b) 0.76; c) 1.31; d) 55. The BCR is 1.31. In this scenario, the costs will be $1,750,000, and the estimated benefits will be $2,300,000. The ratio of benefits to costs would be 2300000 /1750000, or 1.314285714. Therefore, the BCR is 1.31. You should note that a BCR > 1 indicates that the benefits are greater than the costs. With regard to project selection, projects with a higher BCR are preferred over projects with a lower BCR.

Item: 9

What is included in the project charter?

a) a WBS (Work Breakdown Structure); b) a scope statement; c) a definitive project schedule; d) the business need for the project.

The project charter includes the business need for the project. The project charter is created during Initiating Process group and signed by senior management. The project charter is a high-level document that identifies the project manager, the product description, and a description of the business need for the project. The project charter does not include a WBS. A work breakdown structure (WBS) provides a detailed breakdown of the deliverables of a project. The project charter is a high-level document that does not include project details. These details are identified during the Planning Process group, after the Initiating Process group is complete and the project charter has been created. The project charter does not include a scope statement. The scope statement is created during Scope Definition process of the Planning Process group, after the Initiating Process group is complete and the project charter has been created. Although the project charter may contain some schedule information, such as a summary milestone schedule, it does not contain a definitive project schedule. A definitive project schedule is an output of the Schedule Development Process, which is a part of the Planning Process group.

Item: 10

The Initiating process results in all of the following, EXCEPT:

a) the project charter; b) the project scope statement; c) formal authorization of the project; d) the preliminary project scope statement.

The Initiating process does not result in a scope statement. The scope statement is an output of the Scope Definition process of the Planning Process group. The Initiating process involves the formal authorization and beginning of a new project (or project phase). The official outputs of the Initiating process are the project charter and the preliminary project scope statement.

Item: 11

The project charter has been developed for a new medical research project. Who should formally approve this project charter?

a) the project team; b) the stakeholders; c) the project manager; d) a member of senior management.

A member of senior management should approve the project charter. The project charter includes the business need for the project. The project charter is created during Develop Project Charter and signed by senior management. The project charter is a high-level document that identifies the project manager, the product description, and a description of the business need for the project. It is important that the project charter be approved by someone to whom ultimately all team members report.

Item: 12

You have been asked to evaluate the potential projects shown in the exhibit. Which project should you recommend? // IRR – Internal Rate of Return

a) project V; b) project W; c) project Y; d) project Z.

You should recommend Project W. In this scenario, you are given five potential projects, including the payback period and IRR for each. The payback period represents the amount of time that it will take to recoup the initial investment in the project. This equates to how long it will take before the project will begin turning a profit. Projects with lower payback periods are preferred over projects with higher payback periods because they will begin making a profit sooner. The IRR, or Internal Rate of Return, represents the project's return expressed as an interest rate. Projects with higher IRR values are preferred over those with lower IRR values. A higher IRR value indicates that the return on the project will be greater. In this scenario, Project W has one of the lowest payback periods and the highest IRR. You should recommend Project W. You should not recommend Project V. Although Project V ties with Project W as having the highest IRR, it has a higher payback period than Project W. Therefore, it would not be the best choice. You should not recommend Project Y. Although Project Y ties with Project W as having the lowest payback period, it has a lower IRR than Project W. Therefore, it would not be the best choice. You should not recommend Project Z. Project Z has a higher payback period and a lower IRR than Project W. Therefore, it would not be the best choice.

Item: 13

You are PM (Project Manager) for a project that has a payback period of 13 months. Which statement is true about the project?

a) the project can be completed in 13 months; b) the project will begin generating revenue after 13 months; c) the project will begin generating a profit in the 13th month; d) it will take 13 months to recover the project's initial monetary investment.

The statement that is true is: - It will take 13 months to recover the project's initial monetary investment. The payback period of a project refers to the amount of time that it will take to recoup the investment and begin generating a profit. In this scenario, the project has a payback period of 13 months. In the first 13 months, the project will recover its initial monetary investment. The payback period is not associated with the time it takes to complete a project. The project may begin generating revenue during the first month but not generate a profit until after the payback period. The project will begin generating a profit in the 14th month. The first 13 months will be required to recover the investment in the project.

Item: 14

You have three projects from which to choose. Project A has an IRR (Internal Rate of Return) of 23%. Project B has an IRR of 18%. Project C has an IRR of 6%. Which project is more attractive? // IRR – Internal Rate of Return

a) project A; b) project B; c) project C; d) there is not enough information to make this determination.

Project A is more attractive. In this scenario, you are given three projects and their respective IRR values. The IRR, or Internal Rate of Return, represents the project's return expressed as an interest rate. Projects with higher IRR values are preferred over those with lower IRR values. A higher IRR value indicates that the return on the project will be greater.

Item: 15

A constraint can be described as:

a) a factor that limits the options of the project team; b) a deliverable that must be met for project completion; c) an assumption that will impose a restriction on the project; d) a restriction purposefully imposed on a project to minimize scope change.

A constraint can be described as a factor that limits the options of the project team. Constraints are restrictions that affect the performance or scheduling of a project. Constraints limit the options afforded the project team. All of the other options are incorrect because they do not correctly describe a constraint.

Item: 16

Enterprise environmental factors are an input to the Develop Project Charter process as well as many other processes. Which of the following options is an enterprise environmental factor?

a) corporate policy on communication requirements; b) commercial databases; c) a knowledge base of company projects; d) issue and defect management policies.

Commercial databases are an enterprise environmental factor. The other choices can be categorized as organizational process assets. Enterprise environmental factors and organizational process assets both contribute to many project management processes, so it is important to understand what each consists of and how they differ from each other.

According to the PMBOK, enterprise environmental factors include the culture and structure of the organization, governmental and industry standards, infrastructure, human resources, personnel administration and documentation, marketplace conditions, risk tolerances, commercial databases, and project management information systems. The PMBOK breaks a company's organizational process assets down into two general categories: 1. Processes and procedures. Processes and procedures actively contribute to the work of the company. Processes include company standards, policies, guidelines, templates, communication requirements, and project closure guidelines. Procedures include those for financial controls, issue and defect management, change control, risk control, and work authorization approvals. 2. Knowledge base. A company's knowledge base stores information that is not specifically contributing to the daily work of the company. The information can, however, be retrieved for use as needed. The knowledge base contains a company's process measurement databases, project files, historical information, lessons learned knowledge base, issue/defect tracking database, configuration management database, and financial database. In general, organizational process assets are company-specific processes that actively contribute to the work of the company. The key terms are "process" and "assets," where processes are the policies, procedures, and guidelines, and the assets are the knowledge bases. Organizational process assets typically (but not exclusively) contain proprietary information belonging to the company. By contrast, enterprise environmental factors tend to apply to all companies operating in the appropriate arenas, and the information contained within the enterprise environmental factors is available to all (whether it is free or costs money). The key term is "factor," which signifies influences and forces beyond the day-to-day control and processes of a company's work.

Item: 17

What is true about the cost of a project?

a) costs are typically higher at the end of a project; b) costs are typically lower at the beginning of a project; c) costs are typically higher at the beginning of a project; d) costs continually increase over the life of the project until the Closing phase

begins. The statement that is true is: costs are typically lower at the beginning of a project. Costs fluctuate over the course of the project life cycle. However, for the majority of project life cycles, costs typically are lower at the beginning of the project, higher toward the end of the project, and drop dramatically as the project is concluded. All of the other options are incorrect because they do not represent true statements about project cost.

Item: 18

Your company's senior management is considering four projects for the upcoming calendar year. Due to limited resources, all projects cannot be ongoing at the same time. Project A has a payback period of 20 months and an NPV (Net Present Value) of 300. Project B has a payback period of 24 months and an NPV of <275>. Project C has a payback period of 18 months and an NPV of <250>. Project D has a payback period of 36 months and an NPV of 300. Which project should you recommend?

a) project A; b) project B; c) project C; d) project D. You should recommend Project A. Project selection often involves evaluating the project using several different methods. In this scenario, you are given the NPV and payback period for each potential project. The NPV (Net Present Value) is a calculation that you can use to evaluate what a project is currently worth. The payback period is the amount of time it will take to recoup your investment in a project. When selecting projects, you should select those with the highest NPV and the shortest payback period. Project A has one of the highest NPV values (300) and has a payback period shorter than Project D. Therefore, Project A would be the best choice. You should not recommend Project D. While Project D does have an acceptable NPV, its payback period is longer than that of Project A. Therefore, Project D would not be the best choice. Popular project selection techniques include Benefit Cost Ratio (BCR), Internal Rate of Return (IRR), Net Present Value (NPV) and Present Value (PV), opportunity cost, payback period, and Return on investment (ROI).

Item: 19

The two major categories of project selection methods include:

a) benefit measurement methods and cost-benefit analysis methods; b) weighted scoring methods and cost-benefit analysis methods; c) benefit measurement methods and mathematical model methods; d) weighted scoring methods and constrained optimization methods.

The two major categories of project selection methods include benefit measurement methods and mathematical model methods. Benefit measurement methods of project selection use different comparisons to determine the project to select. Benefit measurement methods include benefit/cost analysis, scoring models, and analyzing cash flow using payback period, discounted cash flows, net present value, and internal rate of return. Mathematical model methods use algorithms of various types, such as linear, non-linear, or multi-objective programming algorithms. All of the other options are incorrect because they do not reflect the two major categories of project selection methods.

Item: 20

Project selection methods are tools and techniques to which process?

a) Develop Project Charter; b) Scope Planning; c) Scope Definition; d) Scope Verification.

Project selection methods are tools and techniques of the Develop Project Charter process. The inputs to the Develop Project Charter process are any contracts, the SOW, any enterprise environmental factors, and any organizational process assets. Then, the tools and techniques are applied to the inputs to create the project charter. Aside from the project selection methods, the tools and techniques include the project management methodology, the project management information system, and any expert judgment. All of the other options are incorrect because project selection criteria are not an input to the Scope Planning, Scope Definition, or Scope Verification process. Inputs to Scope Planning include any enterprise environmental factors, any organizational process assets, the project charter, the preliminary project scope statement, and the project management plan. Tools and techniques for Scope Planning include expert judgment and any templates, forms, or standards in place. Inputs to Scope Definition include any organizational process assets, the project charter, the preliminary project scope statement, the project management plan, and any approved change requests. Tools and techniques for Scope Definition include product analysis, identification of alternatives, expert judgment, and stakeholder analysis. Inputs to Scope Verification include the project scope statement, the WBS dictionary, the project scope management plan, and any deliverables. The primary technique of Scope Verification is inspection.

Item: 21

Weighted scoring methods of project selection are considered:

a) design of experiments; b) decision point methods; c) benefit measurement methods; d) mathematical models.

Weighted scoring methods of project selection are considered benefit measurement methods. Project selection methods can be generally categorized as benefit measurement methods or mathematical models. Benefit measurement methods include comparative methods, such as weighted scoring models. Design of experiments is a statistical method used to identify factors that might influence certain variables. Mathematical models involve linear, non-linear, dynamic, integer, and multi-objective programming algorithms.

Item: 22

All of these are common mechanisms for project selection, EXCEPT:

a) payback period; b) sensitivity analysis; c) benefit-cost analysis; d) weighted scoring models.

Sensitivity analysis is not a project selection method. Sensitivity analysis is used during Quantitative Risk Analysis to determine which risks will have the most potential impact on the project. Project selection methods tend to be benefit-measurement methods or mathematical models. Analyzing payback periods is a common project selection method. A payback period refers to the amount of time it will take to recoup an investment in a project. Projects with a shorter payback period will recoup the project investment quicker. Benefit-cost analysis is a common project selection method. Benefit-cost analysis involves comparing the costs of the project to its estimated monetary benefits. Weighted scoring models are a common project selection method. Weighted scoring models assign a weighting value to each project selection criteria and assess the importance of the criteria for each proposed project.

Item: 23

You have been asked by management to evaluate four potential projects. Which project should you recommend?

a) project A, which has a BCR of -2.1; // BCR – Benefit Cost Ratio b) project B, which has a BCR of 1.2; c) project C, which has a BCR of 2.1; d) project D, which has a BCR of 1.8.

You should recommend Project C, which has a BCR of 2.1. The BCR represents the ratio of benefits to costs. Projects with a higher BCR are more economically beneficial than those with a lower BCR value. In this scenario, Project C has the highest BCR value, so you should recommend it. All of the other options are incorrect because Project C has the highest BCR value. A BCR value of less than one indicates that the costs are greater than the benefits. A BCR value of greater than one indicates that the benefits are greater than the costs.

Item: 24

Which would NOT be an example of a project?

a) constructing a new sports facility; b) billing clients for services performed; c) implementing a manufacturing work-order system;

d) installing additional hardware to improve the corporate network infrastructure Billing clients for services performed would not be an example of a project. According to the PMBOK, a project is defined as "a temporary endeavor undertaken to create a unique product, service, or result." Both projects and normal operations involve planned execution of tasks, often with similar resource constraints. The two key characteristics that differentiate a project from normal operations are that the project is temporary and unique. The term temporary refers to the fact that a project is not ongoing or occurring routinely at regular intervals. A project has a definite beginning point and a definite ending point. The term unique refers to the fact that a project is somewhat different from previously undertaken tasks. Although a project may be similar to a project undertaken in the past, it would not be an ongoing repetitive process such as the billing of clients. Billing of clients would be an ongoing operational process. All of the other examples given represent endeavors that would be examples of projects.

Item: 25

A project is characterized as:

a) a temporary endeavor to create a unique product, service, or result; b) a group of related activities that obtain a specific business objective; c) a planned activity to accomplish a task that has not been previously undertaken; d) a group activities that perform some ongoing function and are managed collectively.

According to the PMBOK, a project is defined as "a temporary endeavor undertaken to create a unique product, service, or result." Both projects and normal operations involve planned execution of tasks, often with similar resource constraints. The two key characteristics that differentiate a project from normal operations are that the project is temporary and unique. The term temporary refers to the fact that a project is not ongoing or occurring routinely at regular intervals. A project has a definite beginning point and a definite ending point. The term unique refers to the fact that a project is somewhat different from previously undertaken tasks. Although a project may be similar to a project undertaken in the past, it would have characteristics to make it different from past projects in some way.

Item: 26

A regulation is often considered to be:

a) a risk; b) a constraint; c) an assumption; d) a risk trigger. A regulation is often considered a constraint for projects. A regulation refers to a document that specifies characteristics of a product, process, or service to which it is mandatory to comply. Because compliance is mandatory, this often serves as a constraint.

A regulation would not be considered a risk. A risk is an event that might happen and positively or adversely affect a project. A change in a regulation could be a project risk, but the regulation itself would not be. A regulation would not be considered an assumption. Assumptions are factors that are considered to be true for planning purposes. Documented assumptions are valuable in determining the project's deliverables and objectives. A regulation would not be considered a risk trigger. A risk trigger is an event that indicates that a risk has or is about to occur.

Item: 27

You have been asked by a senior member of management to assess several potential projects and make a recommendation on which project the company should undertake. Using a weighted scoring model ranking the projects on a scale from 1 to 10, you create the matrix shown in the exhibit. Which project should you recommend?

a) project W; b) project X; c) project Y; d) project Z.

You should recommend Project Y. With weighted scoring models, a weight is assigned to each project selection criteria based on the criteria's importance. Then, each project is rated based on a predefined scale against the criteria. The scale indicates the desirability, with a higher rating indicating the most favorable outcome. For each project, each criteria is examined and the criteria's weight is multiplied by the criteria's rating. These weighted values are summed to determine the total weighted score for the project. The project with the highest weighted score is the project that would be most favorable to the organization. In this scenario, the weighted scores for each project can be calculated as follows: Project W Total Weighted Score = 48 + 12 + 15 + 17.5 + 8 = 100.5; Project X Total Weighted Score = 30 + 36 + 15 + 7.5 + 8 = 96.5; Project Y Total Weighted Score = 48 + 28 + 18 + 17.5 + 16 = 127.5; Project Z Total Weighted Score = 18 + 24 + 9 + 17.5 + 4 = 72.5;

In this scenario, Project Y has the largest total weighted score. Therefore, you should recommend Project Y. All of the other options are incorrect because these projects have a lower total weighted score than Project Y.

Item: 28

You are project manager for a large telecommunications company. Your CEO (Chief Executive Officer) has recently read of new breakthroughs in global positioning that will

allow your company to offer an additional service to its customers. You have been asked to lead the project to develop the new service, and your CEO wants to debut the new offering at a trade show during the first quarter of next year. This project was initiated because of:

a) a social need; b) a business need; c) a marketing demand; d) a technological advance.

This project was initiated because of a technological advance. In this scenario, what made the project possible was advancements in global positioning technology. According to the PMBOK, projects are typically authorized due to problems, opportunities, or business requirements. Common reasons for initiating a project include a market demand, a business need, a customer request, a technological advance, a legal requirement, or a social need. All of the other options are incorrect because this project was not initiated due to a social need, business need, or marketing demand.

Item: 29

You are a project manager for a large manufacturing facility. You are leading a project to implement new equipment on your assembly line. Which is NOT an assumption you might document for the project?

a) the project plan that you have developed is accurate and complete; b) the vendor will be able to deliver the equipment on or before the time it is scheduled to be installed; c) the new equipment cannot be implemented during the last week of the month because it is a peak production time; d) based on workload, the frontline manager will be able to dedicate line employees to assist in testing the new equipment.

The option that does not represent an assumption is as follows: The new equipment cannot be implemented during the last week of the month because it is a peak production time. Constraints impose restrictions on the project. Constraints are factors that will limit the project team's options for completion of the project. Constraints often involve time or budget constraints imposed on a project. Constraints are used in many project management processes. All of the other options are incorrect because they represent assumptions for the project. Assumptions are factors that are considered to be true for planning purposes. Common assumptions include assumptions made about project resources, assumptions made about vendors or contractors, assumptions made about the accuracy of the project plan or scope of work, and assumptions about when particular events will occur.

Item: 30

Your company's project selection committee is considering several new projects. Project A has costs of $1,000,000 and expected cash inflows are $100,000 per year for the first 5 years, and then $200,000 per year for subsequent years. What is the payback period for the project?

a) 60 months; b) 84 months; c) 86 months; d) 90 months. The payback period for the project is 90 months. The payback period is the amount of time that it will take to recoup the costs of the project. This compares the investment to the expected cash inflows. For Project A, the expected revenue will be $100,000 per year for the first 5 years, and then $200,000 per year for each subsequent year. For Project A, the expected cash inflows are as follows: Year 1 - $100,000; Year 2 - $100,000; Year 3 - $100,000; Year 4 - $100,000; Year 5 - $100,000; Year 6 - $200,000; Year 7 - $200,000. In Year 8, you expect cash inflows of $100,000 during the first six months. The cash inflows from the first seven years added to the cash inflows during the first six months of the eighth year will recoup the costs of the project. Therefore, the payback period for the project will be 84 months + 6 months, or 90 months. All of the other options are incorrect because they do not reflect accurate payback periods for Project A.

Item: 31

You are given the following information for several potential projects: - project A has an NPV of -$30,000; // NPV – Net Present Value - project B has an NPV of $185,000; - project C has an NPV of $275,000; - project D has an NPV of $95,000. Which project should you choose to undertake?

a) project A; b) project B; c) project C; d) project D. You should choose to undertake Project C. The NPV (Net Present Value) is a calculation that you can use to evaluate what a project is currently worth. The NPV is derived by calculating and summing the present value of both income and revenue over future periods and then subtracting the costs. Higher NPV values indicate more value. In this scenario, Project C has the highest NPV value.

Item: 32

You are a project manager for a large order processing facility. You have been assigned a new project to implement new equipment on the line that will streamline processing and reduce the amount of time it takes to deliver orders to customers. The project depends on receiving equipment from a vendor, which will then be installed by outside contractors.

For the project to be successful, the vendor must deliver the equipment to your processing facility on or before the date the installers arrive. You have used the vendor in the past for other projects, and you are comfortable that the vendor will be able to deliver the equipment as promised. This is an example of:

a) a constraint; b) an assumption; c) a deliverable; d) a work package.

This is an example of an assumption. Assumptions are factors that are considered to be true for planning purposes. In this scenario, you are assuming based on past experience with the vendor that equipment will be delivered on time. This is not an example of a constraint. Constraints are factors that will limit the project team's options for completion of the project. Constraints often involve time or budget constraints imposed on a project. Constraints are subsequently used in many project management processes. It is important to clearly document and validate constraints for a project because they serve as input to many other project management processes. This is not an example of a deliverable. A deliverable is a tangible, verifiable product of work. This is not an example of a work package. A work package is the lowest level element in a Work Breakdown Structure (WBS). Assumptions are used in many project management processes. Therefore, it is important to clearly document and validate assumptions for a project.

Item: 33

Which statement is true regarding a strong matrix organization?

a) it is the same as a tight matrix organization; b) all of the power rests with the project manager; c) most of the power rests with the project manager; d) the project manager is referred to as an expeditor.

In a strong matrix organization, most of the power rests with the project manager. A strong matrix organization is not the same as a tight matrix organization. Tight matrix is not a valid organization type. Tight matrix refers to locating team members in the same location. In a strong matrix organization, all of the power does not rest with the project manager. The functional manager has some power in any matrix organization. In a projectized organization, all of the power is given to the project manager. In a strong matrix organization, the project manager is not referred to as an expeditor. The project manager is referred to as an expeditor in a functional organization.

Item: 34

Which type of cost estimate would MOST likely be used early in the Develop Preliminary Project Scope Statement process?

a) budget; b) detailed; c) definitive; d) order of magnitude. An order of magnitude cost estimate would most likely be used early in the Develop Preliminary Project Scope Statement process. An order of magnitude estimate is an approximation that is made without detailed data. An order of magnitude estimate has an accuracy of -25% and 75%. An order of magnitude estimate would most likely be used to create a ball-park estimate because it is the easiest to create. A budget estimate would not likely be used early in the Develop Preliminary Project Scope Statement process because it would require more detail to create. A budget estimate has an accuracy of between -10% and 25%. A detailed estimate would not likely be used early in the Develop Preliminary Project Scope Statement process because it would require more detail to create than would be available. A detailed estimate is created from well defined specifications. A detailed estimate, also referred to as a definitive estimate, is typically created using a bottom-up estimating technique. A definitive estimate would not likely be used early in the Develop Preliminary Project Scope Statement process because it would require more detail to create than would be available. A definitive estimate is created from well defined specifications. A definitive estimate is typically created using a bottom-up estimating technique. A definitive estimate has an accuracy of between -5% and 10%.

Item: 35

All of the following are common reasons for initiating a project, EXCEPT:

a) a recognized market demand; b) a specific request from a customer; c) unassigned resources within the organization; d) compliance with an external legal requirement.

Having unassigned resources within the organization would not be a common reason for initiating a project. According to the PMBOK, projects are typically authorized due to problems, opportunities, or business requirements. Common reasons for initiating a project include a market demand, a business need, a customer request, a technological advance, a legal requirement, or a social need. While having unassigned resources within the organization of itself might need to be addressed, this alone would not be a reason to authorize and initiate a project. A recognized market demand would be a common reason to initiate a project. Demands in the marketplace often dictate a need that can be addressed by a new project. A specific request from a customer would be a common reason to initiate a project. Both internal and external customers often make requests for new products or functionality that can be addressed by a new project. Compliance with an external legal requirement would be a common reason to initiate a project. Legal requirements, such as laws or regulations, often mandate new projects.

Item: 36

You are creating an initial budget for a project. The project cannot exceed $475,000, so you will have to create your project plan around this constraint. Which type of cost estimating are you using?

a) top-down; b) bottom-up; c) parametric; d) linear regression. You are using top-down estimating. Top-down estimating involves setting the target cost of the project, and then creating the project design to meet the target cost. This is the opposite of bottom-up estimating, which sums all direct and indirect costs associated with producing the final product to come up with a final budget. The numbers assigned when using top-down budgets are normally based on analogous projects. For example, suppose this project is to install new firewalls. If you had recently completed a similar project, you could use the total costs associated with that project to create a budget for the newer project. Analogous estimating is generally cheaper than other techniques, but it is also less accurate. It is most accurate when the previous projects that form the basis of the estimate are similar to the new project, and not just similar in appearance. You are not using bottom-up estimating. Bottom-up estimating is based on summing individual work items to get a total cost. The cost and accuracy of using bottom-up estimating is dependent on the size and complexity of the work items. The cost estimate is more accurate when the work is broken down to its most granular level, but this also increases the costs associated with deriving the estimate. You are not using linear regression. Linear regression is not a budgeting technique. Linear regression is a useful statistical tool used to compare the relationship between cost drivers and the total project cost. You are not using parametric estimating. Parametric estimating uses the project characteristics in a mathematical model to produce a project estimate. These can be very simple (fiber-optic wiring will cost x dollars per linear foot to install) or very complex (software development models that use multiple adjustment factors, each with multiple key points). Parametric estimating is more reliable when the historical information used to develop the model is accurate, the parameters used in the model are easily measured, and the model scales well.

Item: 37

Organizational process assets are an input to the Develop Project Charter process as well as many other processes. Which of the following choices is NOT an organizational process asset?

a) a company's project-history archive; b) a company's organizational structure and culture; c) a company's quality control checklists; d) a company's guidelines for project closure.

A company's organizational structure and culture is not an organizational process asset. A company's organizational structure and culture is categorized as an enterprise

environmental factor. Although a company's organizational structure and culture are company-specific, they do not actively contribute to the daily work of the company in the way that policies, procedures, and knowledge bases do. Enterprise environmental factors and organizational process assets both contribute to many project management processes, so it is important to understand what each consists of and how they differ from each other. The PMBOK breaks a company's organizational process assets down into two general categories: 1. Processes and procedures. Processes include company standards, policies, guidelines, templates, communication requirements, and project closure guidelines. Procedures include those for financial controls, issue and defect management, change control, risk control, and work authorization approvals. 2. Knowledge base. A company's knowledge base stores information that is not specifically contributing to the daily work of the company. The information can, however, be retrieved for use as needed. The knowledge base contains a company's process measurement databases, project files, historical information, lessons learned knowledge base, issue/defect tracking database, configuration management database, and financial database. According to the PMBOK, enterprise environmental factors include the culture and structure of the organization, standards and regulations, infrastructure, human resources, personnel administration and documentation, marketplace conditions, risk tolerances, commercial databases, and project management information systems. In general, organizational process assets are company-specific processes that actively contribute to the work of the company. The key terms are "process" and "assets," where processes are the policies, procedures, and guidelines, and the assets are the knowledge bases. Organizational process assets typically (but not exclusively) contain proprietary information belonging to the company. By contrast, enterprise environmental factors tend to apply to all companies operating in the appropriate arenas, and the information contained within the enterprise environmental factors is available to all (whether it is free or costs money).

Item: 38

As PM, you are asked to choose from three potential projects. The projects are summarized as: - project A, which has an NPV of $80,000 and will take five years to complete; - project B, which has an NPV of $100,000 and will take two years to complete; - project C, which has an NPV of $100,000 and will take three years to complete; Which project has the BEST value potential? // NPV – Net Present Value

a) project A; b) project B; c) project C; d) all of the projects have the same potential.

Project B has the best value potential. In this scenario, you are given three potential projects, including their respective NPV values and estimated times to completion. The NPV (Net Present Value) is a calculation that you can use to evaluate what a project is currently worth. The NPV is derived by calculating and summing the present value of both income and revenue over future periods and then subtracting the costs. Higher NPV values indicate more value. In this scenario, both Project B and Project C have the highest NPV value. However, Project B will take less time to complete than Project C, so it would have the best value potential. Analyzing NPV values provides you with the information you need to determine which project represents the best value.

Item: 39

Who should issue the project charter?

a) the project sponsor; b) the project manager; c) the primary project stakeholder; d) a manager external to the project.

A manager who is external to the project but has an appropriate level of authority should issue the project charter. The project charter is created during the Develop Charter process of the Initiating Process group, and it should be signed by senior management. The project charter is a high-level document that identifies the project manager, the product description, and a description of the business need for the project.

Item: 40

You are making a presentation for a colleague on his project because he is unwell. You have data, which shows that the project is 30% complete and the projected final cost of the project is expected to be twice of what was planned. All of these could be reasons for this, EXCEPT:

a) project planning was incorrectly done; b) project selection was not done properly; c) the project status meetings held previously failed to keep track of the project costs; d) the project team did not possess the product skills and knowledge and were not

productive. Project selection is a technique used to select which project to undertake. While this is usually performed by members of senior management, sometimes the project manager performs this or is asked for input to the process. Project selection occurs when initiating the project, in the Develop Project Charter process. During project selection, several factors (decision models, expert judgment, etc.) may be reviewed to determine which project would be more desirable to undertake.

All of the other options are incorrect because they could be probable causes of the project being over budget or behind schedule. All these are related to project execution.

Item: 41

Organizational process assets:

a) are a criteria for ranking a company amongst its competitors in the marketplace; b) help define the culture and structure of an organization; c) consist of processes and procedures that actively contribute to the work of the company; d) assist companies in assessing trends in the marketplace.

Organizational process assets consist of processes and procedures that actively contribute to the work of the company. Organizational process assets are not typically a criteria for ranking a company amongst its competitors in the marketplace. A competitive ranking, in general, might be available for use or purchase, and as such it more closely resembles an enterprise environmental factor. Similarly, organizational process assets do not typically assist companies in assessing trends in the marketplace. Marketplace conditions are best categorized as an enterprise environmental factor. The culture and structure of an organization is also classified as an enterprise environmental factor. Enterprise environmental factors and organizational process assets both contribute to many project management processes, so it is important to understand what each consists of and how they differ from each other. According to the PMBOK, enterprise environmental factors include the culture and structure of the organization, governmental and industry standards, infrastructure, human resources, personnel administration and documentation, marketplace conditions, risk tolerances, commercial databases, and project management information systems. The PMBOK breaks a company's organizational process assets down into two general categories: 1. Processes and procedures. 2. Knowledge base.

Item: 42

You are a project manager for a large automobile manufacturer. You are leading a project to implement a new MRP (Material Requirements Planning ) system, which must be implemented by the end of the current fiscal year. As a part of the project, you will be migrating legacy data from the old system to the new system. This will involve a major data conversion effort to be undertaken. One of your software developers has extensive

knowledge of the legacy system. Which is an assumption you might document for the project?

a) management has mandated the MRP system that will be implemented; b) the new MRP system must be implemented by the end of the fiscal year; c) quality standards must be implemented to ensure successful data conversion; d) the software developer with extensive knowledge of the legacy system will be

available for the project. The assumption that you might document for the project is: The software developer with extensive knowledge of the legacy system will be available for the project. Assumptions are factors that are considered to be true for planning purposes. Assuming that specific resources will be available to work on a project would be an assumption. Other common assumptions include assumptions made about vendors or contractors, assumptions made about the accuracy of the project plan or scope of work, and assumptions about when particular events will occur. Therefore, it is important to clearly document and validate assumptions for a project. All of the other options are incorrect because they represent constraints for the project. Constraints impose restrictions on the project. Constraints are factors that will limit the project team's options for completion of the project.

Item: 43

Analogous estimating is which type of cost estimating?

a) top-down; b) bottom-up; c) parametric; d) definitive. Analogous estimating is top-down estimating. Analogous estimates use historical data from similar projects as the basis for estimating a project's costs. Analogous estimating is also known as top-down estimating. Analogous estimating is generally cheaper than other techniques, but it is also less accurate. It is most accurate when the previous projects that form the basis of the estimate are similar to the new project, and not just similar in appearance. Analogous estimating is not bottom-up estimating. Bottom-up estimating is based on summing individual work item estimates to get an estimate. The cost and accuracy of using bottom-up estimating is dependent on the size and complexity of the work items. The cost estimate is more accurate when the work is broken down to its most granular level, but this also increases the costs associated with deriving the estimate. Analogous estimating is not parametric estimating. Parametric modeling uses the project characteristics in a mathematical model to produce a project estimate. These can be very simple (fiber-optic wiring will cost x dollars per linear foot to install) or very complex (software development models that use multiple adjustment factors, each with multiple key points). Parametric modeling is more reliable when the historical information used to develop the model is accurate, the parameters used in the model are easily measured, and the model scales well.

Analogous estimating is not definitive estimating. Definitive estimating is not a valid estimation method.

Item: 44

You have been recently named PM for a large retail clothing manufacturer and have been assigned to a project to release a new product line in another country. After development of the product, the company plans to make the announcement of the new product offerings at a conference next year. The project involves producing a new line of children's sleepwear that is flame retardant. To complete the manufacturing process in this country, the project will require a new piece of equipment and development of a new chemical formula. Which would NOT be considered a deliverable for the project?

a) the chemical formula; b) the new piece of equipment; c) the new sleepwear product line; d) the debut of the new product line.

The debut of the new product line would not be considered a deliverable for the project. Deliverables are tangible, verifiable work outcomes that must completed during a project or project phase. The new product line will be announced after the project is complete. Therefore, the debut of the new product line would not be considered a deliverable. All of the other options are incorrect because they do represent deliverables for the project.

Item: 45

You are a project manager for a large manufacturing company. You are creating an initial budget for your new project. Which would be an example of administrative costs?

a) training; b) vendor fees; c) building leases; d) contractor salaries.

Building leases would be an example of administrative costs. Costs are often categorized as either direct or indirect. Administrative costs, which fall under the indirect costs category, include costs for normal operation of the business, but are not directly related to the project. Because the facilities are necessary for normal operations, the building leases would be considered administrative costs. Training, vendor fees, and contractor salaries would all be associated with the project, and therefore, would not be administrative costs. Costs directly related to a project are considered project costs or direct costs.

Item: 46

You are an experienced project director for a company. You have come up with a potential idea for a project. In your estimation, the project should be a success, but the project involves a few pieces of new technology with which you are not completely familiar. What should you do next?

a) form a project team for the new project;

b) ask the sponsor to fund a feasibility study; c) research the new technology during any downtime you have at work; d) draft a preliminary project scope statement.

You should ask the sponsor to fund a feasibility study. Because you are an experienced project manager, your assessment of the potential project carries some authority. Project management professionals, however, also know their own limits, and in this case you are unfamiliar with some of the new technology the project may need. The best course of action then is to ask the sponsor to fund a feasibility study that will determine if your assessment is correct. The study should also be able to account for the new technology. Feasibility studies are also known as concept studies. You should not form a project team or draft a preliminary project scope statement because such actions are premature. The project may not even be worthwhile to the sponsor. You should not research the new technology during any downtime you have at work. You may not have downtime at work, or you may not have the authority to spend working hours doing such investigation. Moreover, as an experienced project manager, you should realize that business opportunities can quickly disappear. If you have a commitment to your sponsor or organization to generate business opportunities, then relegating this potential business venture to spare time would be irresponsible and may prevent the project from ever happening.

Item: 47

Your manager has asked you to analyze a potential project that your company is considering undertaking. The project has a 75% chance of making a $500,000 profit. However, the project also has a 40% chance of suffering a $400,000 loss. The expected monetary value of this project is:

a) $100,000; b) $185,000; c) $215,000; d) $325,000. The expected monetary value (EMV) for your project is $215,000. In this scenario, the project has a 75 percent chance of yielding a $500,000 profit, but also has a 40 percent chance of rendering a loss of $400,000. The expected monetary value (or expected value) of a given activity is calculated with the formula: EMV = probability x impact In this scenario, the probability of the project yielding a profit would be .75 x $500,000, or $375,000. The probability of the project rendering a loss would be .40 x $-400,000, or $-160,000. To calculate the overall expected monetary value for the project, you combine these calculations by adding them together. The expected monetary value of the project will be $375,000 + $-160000, or $215,000.

Item: 48

You are a project manager for an auto parts distributor. You are reviewing three proposed projects. Project A has an IRR of 29 percent, Project B has an IRR of 45 percent, and Project C has an IRR of 38 percent. Which project should you recommend? // IRR – Internal Return Ratio

a) project A; b) project B; c) project C; d) none of the projects. You should recommend Project B because it has the highest IRR. Projects with higher IRRs are preferred over projects with lower IRRs. Because Project B has a higher IRR, the return for Project B is greater. The internal rate of return (IRR) is simply the project's return expressed as an interest rate. IRR represents the discount rate when the present value of cash inflows is equal to the original investment, in other words the discount rate when NPV equals zero.

Item: 49

Your company's project selection committee is considering two possible projects. Project A will cost $250,000 with expected revenue of $100,000 the first year and $50,000 for each subsequent year. If project B has a payback period of 26 months, which project should you recommend?

a) project A because it has a payback period of 12 months; b) project A because it has a payback period of 24 months; c) project B because Project A has a payback period of 48 months; d) either project A or project B because the payback period for both projects is 26

months. You should recommend Project B because Project A has a payback period of 48 months. The payback period is the amount of time that it will take to recoup the costs of the project. This compares the investment to the expected cash inflows. For Project A, the expected revenue will be $100,000 the first year and $50,000 for each subsequent year. For Project A, the expected cash inflows are as follows: Year 1 = $100,000; Year 2 = $50,000; Year 3 = $50,000; Year 4 = $50,000. Therefore, the amount of time that it will take to recoup the initial investment of $250,000 is 4 years, or 48 months.

Item: 50

When using parametric modeling, when would the estimate be most reliable?

a) when the project has relatively small scope; b) when the project involves a large number of team members; c) when the historical information used to generate the estimate is accurate; d) when the detailed work package estimates used to generate the estimate are

derived by the SMEs. // SME - Small and Middle Enterprise When using parametric modeling, the estimate be most reliable when the historical information used to generate the estimate is accurate. Parametric modeling uses the project characteristics in a mathematical model to produce a project estimate. These can be very simple (fiber-optic wiring will cost x dollars per linear foot to install) or very complex (software development models that use multiple adjustment factors, each with

multiple key points). Parametric modeling is more reliable when the historical information used to develop the model is accurate, the parameters used in the model are easily measured, and the model scales well. Parametric modeling is scalable and not affected by the relative size of the scope of the project. Parametric modeling works as well for large projects as it does for small ones. Parametric modeling is scalable and not affected by the relative size of the project team. Parametric modeling works as well for small project teams as it does for large ones. Parametric modeling uses the project characteristics in a mathematical model to produce an estimate. These can be very simple (fiber-optic wiring will cost x dollars per linear foot to install) or very complex (software development models that use multiple adjustment factors, each with multiple key points). With parametric modeling, bottom-up detailed work package estimates are not used.

Item: 51

Enterprise environmental factors are an input to the Develop Project Charter process as well as many other processes. Which of the following choices is NOT an enterprise environmental factor?

a) organizational culture; b) governmental and industry standards; c) marketplace conditions; d) lessons learned knowledge base.

A lessons learned knowledge base is not an enterprise environmental factor. A lessons learned knowledge base is categorized as an organizational process asset. Enterprise environmental factors and organizational process assets both contribute to many project management processes, so it is important to understand what each consists of and how they differ from each other. According to the PMBOK, enterprise environmental factors include the culture and structure of the organization, governmental and industry standards, infrastructure, human resources, personnel administration and documentation, marketplace conditions, risk tolerances, commercial databases, and project management information systems. The PMBOK breaks a company's organizational process assets down into two general categories: 1. Processes and procedures. 2. Knowledge base.

Item: 52

Which three factors are traditionally referred to as the "triple constraint"?

a) time, cost, and risk; b) time, cost, and scope; c) time, cost, and quality;

d) time, risk, and performance. The three factors that are traditionally referred to as the "triple constraint" are time, cost, and scope. The PMBOK defines a constraint as a restriction that will affect the performance of a project or when an activity can be scheduled. Project managers have traditionally identified three such constraints, commonly referred to as the "triple constraint." These are time, cost, and scope. All of the other options are incorrect because they do not identify the factors that are traditionally referred to as the "triple constraint." While quality, risk, and performance are all important in terms of managing a project, these typically encompass the more basic constraints of time, cost, and scope.

Item: 53

NPV assumes reinvestment at: // NPV – Net Present Value a) the current rate; b) the cost of capital; c) the prevailing rate; d) the internal rate of return.

NPV assumes reinvestment at the cost of capital. All of the other options are incorrect because they do not correctly characterize NPV.

Item: 54

Your company is evaluating three projects. Project A has an NPV of $70,000. // NPV – Net Present Value Project B has an NPV of $90,000. Project C has an NPV of $20,000. The organization's project selection committee decides to undertake project B. What is the opportunity cost?

a) $20,000; b) $70,000; c) $90,000; d) this cannot be determined. The opportunity cost is $90,000. Opportunity cost refers to the cost of opportunities missed by choosing to invest in a project. In this scenario, the project selection committee selected to undertake Project B. The opportunity costs would equal the sum of the NPVs of the other two projects. The opportunity cost would be $70,000 + $20,000, or $90,000. All of the other options are incorrect because they do not reflect the accurate opportunity cost. The NPV is a calculation that you can use to evaluate what a project is currently worth. The NPV is derived by calculating and summing the present value of both income and revenue over future periods and then subtracting the costs. Higher NPV values indicate more value.

Item: 55

You are a project manager for a direct mail company. You have recently been assigned a project to migrate your existing mail-sorting software from the company's mainframe environment to a new platform that will provide enhanced functionality at a lower cost. The preliminary budget for the project has been approved, and the sponsor has notified you that the maintenance contract on the existing mainframe software is up for renewal in the last quarter of the year. The system must be implemented prior to the renewal date to ensure that cost is minimized and no additional payments for mainframe maintenance are incurred. Which constraint is the primary constraint for your project?

a) cost; b) time; c) scope; d) quality. In this scenario, time is the primary constraint. The primary constraint on a project is the constraint that has the highest importance. While many constraints may affect the project, your project must be completed before the mainframe maintenance contract requires renewal. Typically, a contract renewal date would be a hard date that could not move. Therefore, you must successfully migrate to the new platform prior to the renewal date of the mainframe maintenance contract.

Item: 56

You are organizing your project team. The project is quite complex and is expected to take at least one year to complete. The project will affect every functional area (i.e., Marketing, Engineering, Sales, IT) within the company, and the project team will be recruited from each of the affected functional areas. Which type of team structure is BEST for this project?

a) matrix; b) functional; c) projectized; d) computational. The best team structure for this project is matrix. Because team members will be pulled from multiple functional areas, the matrix organization will work best. A matrix organization is one in which team members report to both a functional manager and a project manager. A matrix organization allows team members to work on a project without losing their place within the organization. The team members might split their time between the project and their normal duties, or they might devote all of their time to the project while functioning as representatives of their functional managers. In either capacity, a matrix organization balances the needs of the functional managers and the project manager. The best team structure for this project is not functional. A functional organization is one in which the project team members only report to a functional manager. This only works well for projects with scopes that are clearly limited to the boundaries of one function (e.g., Accounting). The best team structure for this project is not projectized. A projectized organization is one in which the project team members only report to the project manager. This type of organization works well for most small projects and ones that are confined to a single functional area. However, it can be difficult to gain the functional managers' support for a

project that will take their resources for long periods of time, especially if the project does not greatly impact their functional areas. The best team structure for this project is not computational because this is not a valid organizational structure. Weak matrix organizations have many of the characteristics of a functional organization, and strong matrix organizations have many of the characteristics of a projectized organization.

Item: 57

You have been designated as the project manager for an internal software development project. You are having difficulty obtaining consensus among the stakeholders regarding the project's deliverables. After meeting with the stakeholders, you conclude that it will be impossible to satisfy all of the stakeholders. What should you do?

a) meet with the stakeholders to reach a consensus about which stakeholders should withdraw from the project;

b) accept the fact that you will not be able to reach consensus and concentrate on the needs of the most senior stakeholders;

c) gather and analyze the desired stakeholder deliverables and produce those deliverables that are common to all stakeholders;

d) obtain agreement that formal sponsor sign-off will be required on all major deliverables before their development will begin.

You should obtain agreement that formal sponsor sign-off will be required on all major deliverables before their development will begin. This will ensure that the project requirements are clear and complete and that all the stakeholders are in agreement before you begin to develop each deliverable. It is crucial that the project stakeholders clearly and completely define the deliverables. Remember that it is their job to define the products or services that provide value to the organization. While they might not agree on all the deliverables, you must insist that they reach consensus and formally sign-off on the deliverables before you begin to develop each deliverable. You should not meet with the stakeholders to reach a consensus about which stakeholders should withdraw from the project. All stakeholders are stakeholders because they are affected by the project. You must assume that each stakeholder has valuable input to make and that the project will not be successful unless all stakeholders find value in the final project outcome. Eliminating stakeholders would ensure that the final product would not be as valuable as it might have been. In most cases, it will ensure the project's failure. You should not accept the fact that you will not be able to reach consensus and concentrate on the needs of the most senior stakeholders. You will need the support and cooperation of all stakeholders if the project is to be successful. You should not gather and analyze the desired stakeholder deliverables and produce those deliverables that are common to all stakeholders. While you might analyze the desired deliverables and present them in a matrix to show the stakeholders the relative commonality among the various needs, it is up to the stakeholders to decide which

deliverables should be produced. As the project manager, you should not make the decisions regarding which deliverables should be produced and which ones should not be produced.

Item: 58

You are a project manager for a new software development project for your company. You have identified the project's goals and objectives, and you need to determine resource requirements for the project. All of the following would be resource requirements, EXCEPT:

a) network connections needed by software developers; b) contractors needed to perform specialized programming tasks; c) additional staging servers that will be need for the testing phase of the project; d) the programming assignments that represent the individual modules to be

developed. The programming assignments that represent the individual modules to be developed would not be considered resources necessary for the project. Instead these would most likely be considered deliverables of the project. All of the other options are incorrect because they do represent resources needed for the project. Project resources include human resources and other non-human resources, such as equipment, materials, hardware and software, supplies, training, and travel.

Item: 59

What is NOT true about a project's life cycle?

a) it defines the beginning and end of the project; b) it has the same phases for each of its subprojects; c) it characterizes the work to be performed in each project phase; d) it links the project to other ongoing operations of the organization.

The project life cycle does not have the same phases for each of its subprojects. Each subproject has its own defined life cycle. Although many project life cycles have similar phase names, this is not required. A project may have different life cycle phases defined in different subprojects. The project life cycle defines the beginning and end of the project. The project life cycle characterizes the work to be performed in each project phase. The project life cycle can link the project to other ongoing operations of the organization because it defines the beginning and ending points of the project.

Item: 60

You develop a budget estimate for your project. Which accurately represents the accuracy range of your estimate?

a) -5% to 10%; b) -10% to 10%; c) -10% to 25%; d) -25% to 75%.

A budget estimate has an accuracy of between -10% and 25%. A budget estimate would not likely be used early in the Develop Preliminary Project Scope Statement process because it would require more detail to create. A definitive (bottom-up) estimate has an accuracy of between -5% and 10%. A definitive estimate is created from well defined specifications. An order of magnitude (analogous, top-down) estimate has an accuracy of between -25% and 75%. Such cost estimate would most likely be used early in the Develop Preliminary Project Scope Statement process. An order of magnitude estimate is an approximation that is made without detailed data. An order of magnitude estimate would most likely be used to create a ball-park estimate because it is the easiest to create.